Holiday and holiday pay

Workers are entitled to paid holiday. Holiday entitlement accrues whether the worker works work full-time, part-time, or through an agency or under a zero hours contract. Only genuinely self-employed individuals or contractors are not entitled to paid holiday

Full time workers have the right to a minimum of 5.6 weeks paid annual leave, or 28 days including bank holidays. Part time workers are entitled to a pro rata proportion of the equivalent full time workers entitlement. Workers who take full advantage of their annual leave allowance are generally happier, healthier, and more productive at work; which is why pay in lieu of accrued but untaken statutory holiday entitlement can only be made on termination of employment. Businesses should encourage their staff to use their full annual leave entitlement.

Workers must be paid at the same rate of pay while they are holiday as they would be paid if they had worked. Whilst this is a straight forward calculation for full time salaried workers or those that work regular hours it is a more complex calculation for atypical workers, such as shift workers, whose hours vary from week to week. In those circumstances holiday pay should be calculated based on the mean average amount earned in the twelve weeks prior to the holiday.

It is a given that workers should be paid their basic pay whilst on holiday, but they may also be entitled to commission. If a worker normally receives commission based on performance, this should be included as part of the holiday pay as it reflects the contractual results-based commission that the worker may ordinarily receive if they were not on holiday. The rationale for this requirement is that it is to offset the disadvantage of not being able to generate sales, or leads, whilst on holiday, meaning that income may take a dip in the period after annual leave is taken.

Businesses should have clear policies on how to book holidays, how much notice should be given and on practical issues such as how many workers in a team can be on leave at the same time.

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